Texas Hemp Wins $300 Million Reopening Bid as Voters Oust Patrick

Texas hemp operators sold enough product to generate $300 million a year in state tax revenue before Lt. Gov. Dan Patrick's restrictions squeezed the market. On Election Day, voters answered with a Democratic sweep that removed him from office.

State Rep. Vikki Goodwin of Austin unseated Patrick by attacking his incumbency and his push to ban hemp-derived THC products. She campaigned on undoing those restrictions and using the sales tax revenue to fund health insurance for low-income Texans. Passing that plan will be harder than promising it.

Patrick had spent years targeting THC products. State officials banned several hemp-derived cannabis items, including smokeable vapes and joints. He defended the stance publicly.

"I'm not going to legalize marijuana in Texas. And if people want to vote me out of office for that, so be it," Patrick said at a news conference last year.

Texans did exactly that.

"This is the biggest [mess]-around-and-find-out moment I have ever seen in politics," said Lukas Gilkey, chief executive of Hometown Hero, a manufacturer of hemp-derived products.

What did the election actually change?

Not an immediate fix, said Shayda Torabi, co-founder of RESTART CBD in Austin. Smokable products have bounced between agency rules and court orders, and she said businesses and customers cannot plan around that instability.

"Lawmakers can write clear rules: age limits, testing, labeling and real enforcement against bad actors," Torabi said.

She warned of a federal deadline. Even if Texas lifts its smokeable ban, THCA flower — the raw, unheated form of THC — fails the new federal total THC test starting Dec. 11. Smokeable products in Texas will need either a federal walk-back or a state-legal market built by lawmakers and agencies.

"Don't assume the election fixed this," Torabi said. "Texans could go a while without access to some products."

How much did THC drive the sweep?

Patrick's 2025 ban push drew more backlash than nearly any other policy proposal, including criticism from far-right personalities who had long supported him. The Legislature passed the ban before the governor vetoed it.

"I truly believe THC access was on the ballot in Texas. Each of the major campaigns, including Talarico, Hinojosa, and Goodwin, made hemp a key issue in their campaign," said JD McCormick, founder of the Florida-based American Healthy Alternatives Association. "Patrick clearly underestimated how popular hemp was."

Texas Majority PAC Executive Director Katherine Fischer said THC was one of many factors. "I think THC was one of the many things that helped people make up their minds that Republicans in the state don't care about them and that they should vote in a different way than they have been voting," she said at a press conference on the midterms.

Erik Peterson, an associate professor of political science at Rice University, framed the result as accumulated grievances meeting a bad national environment.

"Whether it was school vouchers or THC, many of these things are probably not going to be decisive on their own, but when they intersect in a very unfavorable national political environment, that is when you see the kind of surprising and unprecedented shifts that we saw in a lot of places across Texas last night," Peterson said.

What rules are on the books now?

The Texas Department of State Health Services released regulations on consumable hemp-derived THC products that took effect March 31. The rules require:

• Child-resistant packaging
• New labeling, testing and bookkeeping requirements
• A codified purchase age of 21, first imposed last year by emergency directive
• A total THC cap of 0.3% in products

Retailers warned lawmakers the 0.3% cap would eliminate smokeable products — rolled joints and flower buds that make up more than 50% of some stores' inventories. The rules took effect anyway.

Licensing fees jumped from $258 to $10,000 per manufacturing facility. Retail registrations rose from $155 to $5,000. Industry leaders say those costs will force businesses to close and fulfill the ban by economics rather than statute.

Several hemp organizations sued over the rules. Those cases are still in court, and retailers expect a friendlier bench now that voters replaced many of the judges who initially ruled against the industry.

What happens when the Legislature convenes?

When the Legislature convenes Jan. 12, it will face a basic question: whether hemp-derived THC is legal under Texas law, through either a regulated hemp market or a broader cannabis framework. Legalized products could not leave the state, mirroring how legal marijuana states operate, but they could return to shelves safely.

"Of course, Texas could also consider creating a more comprehensive legal cannabis market, as 24 other states have done, and allow smokable cannabis through that channel," said Katharine Neill Harris, a drug policy fellow at Rice University's Baker Institute for Public Policy.

Harris said Goodwin's win opens a window for responsible regulation, but Goodwin cannot act alone. "She will need support from the Legislature and there are still folks in the Senate who want to see hemp banned, though Hinojosa's win in the governor race could block those attempts," Harris said. "If Goodwin is afforded the power Patrick had over the Senate, she could block ban efforts, but the Senate Republicans may try to take that power away."

Harris prefers legislation over piecemeal rulemaking because statutes are less vulnerable to litigation. She sees no sign that DSHS would voluntarily change its rules, though litigation over the THCA rule continues and the deciding court's makeup may change.

Gilkey wants the old framework back. "Nothing has to change drastically. We had something that worked for seven years. We had something that thrived and generated $300 million a year in state tax revenue," he said. "The regulations already exist; we have rules we have to abide by. There is not a lot that needs to be changed, other than removing some of the garbage that was created by Dan Patrick through the rulemaking process."

He added: "I think Vikki is going to represent constituents the way that it should have been done, and we're going to start working to repeal all of this nonsense immediately."

"There is no reason that (hemp) flower shouldn't be legal. There is no reason that vapes shouldn't be legal," Gilkey said.

The Dec. 11 federal THC test deadline now sets the industry's first clock, well before lawmakers gavel in on Jan. 12.